IBM breached contract, but Indiana owes it $50 million, Indiana Supreme Court rules

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INDIANAPOLIS (AP) — The Indiana Supreme Court has ruled IBM Corp. breached its state contract in its failed attempt to privatize Indiana’s welfare services but is still entitled to nearly $50 million in state fees.

Tuesday’s ruling upholds a 2014 state Court of Appeals ruling and reverses a trial court’s finding that Indiana failed to prove IBM breached the $1.3 billion state contract it won in 2006.

Then-Gov. Mitch Daniels canceled the contract in 2009 after the privatization effort failed. The parties then countersued.

Tuesday’s ruling also reverses the trial court’s award of $13 million to IBM and directs that court to determine how much IBM owes Indiana in damages.

Peter Rusthoven, a private attorney representing Indiana’s welfare services agency, says Indiana claims about $175 million in damages from IBM’s contract breach.

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